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The yield of plant variety protection

Russell ThomsonSwinburne University of Technology

What government policies are best for farmers and society?

What role can Plant Variety Protection play?

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Overarching questions:

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Policy Rationale

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Policy evaluation

What information do we need?

Evidence based policy

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Public breeding

(free seeds)

Plant Variety

Protection (royalty funded

breeding)

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Australia as a natural experiment

• Historically new wheat varieties bred by government

• 1994 Plant Breeders’ Rights Act

– not motivated by concerns regarding wheat breeding

• 1996 End-Point Royalty system introduced

– Privatization or discontinuation of government breeding

programs

– New private breeders enter market

Compare output from two business models

Number of varieties released and their ‘performance’

Free seed(government funded)

Royalty funded

VS

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Index of variety performance

• 250 wheat varieties, 1976–2011, (i)• 23 regions (k)

Sources: NVT, historic sowing guides, U Sydney rust program

𝐏𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞𝒊𝒌=𝐘𝐢𝐞𝐥𝐝 𝒊𝒌×𝐐𝐮𝐚𝐥𝐢𝐭𝐲 𝒊𝒌−𝐑𝐮𝐬𝐭 𝐜𝐨𝐧𝐭𝐫𝐨𝐥𝐜𝐨𝐬𝐭𝐬𝒊

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Predicted Yield

• National Variety Trial, Multi Environment Trial predicted yields.

• Yield data from historical sowing guides (SG)– Multi-year average relative yield– Scaled by yield of varieties common to both data sets

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Market price indicates qualityGrade classification

Price per tonne

Prime hard $274

Hard $259

Noodle $261

Soft $257

Premium White $242

Standard White $232

General Purpose† $225

Feed $199

• Long run average price of each grade

• AWB pool returns by pay grade (10 year average), 1997/08–2007/08 (A$/tonne)

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Value of rust resistance via representative control costs

Seed Dressing Foliar application CostResistance Rating Fungicide Rate Fungicide Rate Apps Very Susceptible Fluquinazole 450 Expoxiconazole 375 2 $64.25Susceptible Fluquinazole 450 Expoxiconazole 375 1 $38.12Moderately Susceptible

Triadimenol 150 Propiconazole 375 1 $20.04

Moderately Resistant

Triadimenol 150 Triadimefon 750 1 $14.39

Resistant Triadimenol 100 - - - $1.69Very Resistant - - - $0.00

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𝐏𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞𝒊𝒌=𝐘𝐢𝐞𝐥𝐝 𝒊𝒌×𝐐𝐮𝐚𝐥𝐢𝐭𝐲 𝒊𝒌−𝐑𝐮𝐬𝐭 𝐜𝐨𝐧𝐭𝐫𝐨𝐥𝐜𝐨𝐬𝐭𝐬𝒊

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Measuring breeder business model

• Structural shift around policy reform• Private breeder dummy• Share of breeders’ varieties that attract

royalties.

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Control variables

• Hybrid variety• Clearfield• Time trend

• Rainfall• Selection model (Inverse Mills Ratio)

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Main resultChange in business model measured by: Association with

Released after 2000 -7.7 %

Private breeder (t-5) -2.5%

Share of breeders recent varieties that attract end point royalties (t-5) -2.8%

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Result

Varieties released by royalty funded breeders exhibit a lower productivity advantage

• What does this mean?... • Most new varieties below the frontier in most regions anyway.

Result holds when focusing on best varieties in the largest regions.

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What’s going on?

Theory: • Less knowledge sharing and exchange (spillovers)• Inadequate incentive?

Interviews:• Less sharing of information and germplasm • Commercial imperative to release varieties with no clear

advantage = exactly what I found

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Implications • One study consensus.

• More research is needed but given absence of positive evidence policy should proceed cautiously

• Do PVP provide an adequate incentive? – Stronger PVP or subsidize private breeders?

• Do PVP diminish productivity?– E.g., reduced knowledge / germplasm exchange?

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Thank you for listening